Which of the Following Is Not an Advantage of Cost-Plus

question 134

Multiple Choice

Which of the following is not an advantage of cost-plus pricing?

• A)It is easy to calculate.
• B)It requires little information.
• C)If a firm is selling multiple products, it ensures that the firm's prices will cover costs that are difficult to assign to one product.
• D)It ensures that the firm will maximize its profits.

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Definitions:

Substitute Goods

Products or services that can be used in place of each other, where an increase in price for one leads to an increase in demand for the other.

Good Faith

A principle of honesty and sincerity of intention in one's actions, especially in contractual or negotiation contexts.

Implied Warranty of Merchantability

A legal presumption that a product will meet the reasonable expectations of quality and performance for goods of its kind.

Bicycle Merchant

A retailer specialized in the sale and service of bicycles and related accessories.